Litigation Funding Agreement for Malaysia

Litigation Funding Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that establishes the terms and conditions under which a third-party funder provides financial support for litigation or arbitration proceedings. The document details funding commitments, return structures, control mechanisms, and risk allocation between the funder and funded party, while ensuring compliance with Malaysian legal requirements, particularly recent developments in litigation funding permissibility, especially in the context of arbitration and insolvency proceedings.

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What is a Litigation Funding Agreement?

The Litigation Funding Agreement serves as a crucial document in the Malaysian legal landscape, particularly following recent developments that have increasingly recognized third-party funding arrangements, especially in arbitration and insolvency contexts. This agreement is utilized when a party seeks external funding for their legal proceedings but lacks the immediate financial resources to pursue their claim. The document comprehensively addresses funding arrangements, return structures, control mechanisms, and risk allocation, while ensuring compliance with Malaysian legal requirements, including the Legal Profession Act 1976 and relevant financial regulations. The agreement becomes particularly relevant in complex commercial disputes, international arbitration, and insolvency proceedings where significant legal costs may be involved.

What sections should be included in a Litigation Funding Agreement?

1. Parties: Identification of the funded party, the funder, and any other relevant parties to the agreement

2. Background: Context of the litigation, relationship between the parties, and purpose of the funding arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Funding Commitment: Specific details of the funding to be provided, including amount, drawdown conditions, and any caps or limitations

5. Return on Investment: Structure of the funder's return, including percentage of proceeds and priority of payments

6. Control and Conduct of Litigation: Decision-making rights and responsibilities regarding the litigation strategy and settlement

7. Obligations of the Funded Party: Key responsibilities and commitments of the party receiving funding

8. Obligations of the Funder: Key responsibilities and commitments of the funding party

9. Representations and Warranties: Key statements of fact and assurances from both parties

10. Confidentiality: Provisions regarding confidentiality of the agreement and litigation information

11. Termination: Circumstances under which the agreement can be terminated and consequences

12. Dispute Resolution: Process for resolving disputes between the parties to the funding agreement

13. General Provisions: Standard boilerplate clauses including governing law, notices, and amendments

What sections are optional to include in a Litigation Funding Agreement?

1. Legal Professional Privilege: Specific provisions addressing the maintenance of legal privilege, particularly relevant when the funder needs access to privileged information

2. Insurance: Requirements for after-the-event insurance or other insurance arrangements, if applicable

3. Security Arrangements: Details of any security or charges over the proceeds, necessary when required by the funder

4. Multiple Proceedings: Provisions dealing with related proceedings or appeals, relevant when the litigation might involve multiple actions

5. Cross-Border Provisions: Additional provisions for cases involving international elements or multiple jurisdictions

6. Assignment and Syndication: Provisions allowing the funder to assign or syndicate its rights, when such flexibility is required

What schedules should be included in a Litigation Funding Agreement?

1. Schedule 1: Funding Details: Detailed breakdown of the funding commitment, including payment schedule and caps

2. Schedule 2: Project Budget: Detailed budget for the litigation, including legal fees and other costs

3. Schedule 3: Return Waterfall: Detailed structure of how proceeds will be distributed among parties

4. Schedule 4: Key Personnel: List of key contacts and their roles for both parties

5. Schedule 5: Reporting Requirements: Details of required regular reports and updates

6. Schedule 6: Form of Drawdown Notice: Template for requesting funds under the agreement

7. Schedule 7: Case Summary: Detailed description of the litigation case and merits

8. Appendix A: Power of Attorney: If required, formal authorization for certain actions

9. Appendix B: Solicitor's Certificate: Independent legal advice confirmation if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant Industries

Financial Services

Insurance

Legal Services

Construction

Manufacturing

Mining and Resources

Technology

Real Estate

Healthcare

Retail

Energy

Infrastructure

Transportation

Professional Services

Relevant Teams

Legal

Finance

Risk Management

Compliance

Corporate Secretariat

Investment

Business Development

Operations

Strategy

Relevant Roles

Chief Legal Officer

General Counsel

Legal Director

Chief Financial Officer

Finance Director

Risk Manager

Compliance Officer

Corporate Secretary

Litigation Manager

Legal Counsel

Investment Manager

Fund Manager

Insolvency Practitioner

Commercial Director

Business Development Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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